Comcast, Cox take control of Liberate

Mon, 01/31/2005 - 7:00pm

In a move that gives them firm internal control of their interactive television (iTV) futures, Comcast Corp. and Cox Communications have jointly signed a deal to acquire the bulk of iTV software firm Liberate Technologies.

In a deal valued at $82 million, Liberate will sell the assets of its North American business to Double C Technologies LLC, a joint venture majority owned and controlled by Comcast. Cox holds a minority stake in the J.V.

Cox and Comcast said they plan to cross-license Liberate's technology and intellectual property. The agreement also gives Comcast and Cox control of the Liberate platform and how it is designed and deployed across their systems.

Liberate, which expects to hold on to its European business, is a key contributor to OnRamp to OCAP, a software platform for thin-client set-tops designed to help MSOs carve out a migration path to applications aimed for the much more robust OpenCable Application Platform (OCAP), a middleware specified by CableLabs. Cox has championed the OnRamp initiative despite lingering questions about Liberate's ability to remain viable in the long-term. The acquisition by the Comcast-Cox J.V. all but erases those concerns.

The deal also underscores cable's surging interest in iTV, a position spurred by iTV products from EchoStar Communications and Rupert Murdoch's DirecTV, which is expected to use several interactive elements BSkyB has used with success in the U.K.

Deals that give MSOs more control of set-top software are becoming more and more commonplace. Comcast established control of its interactive program guide fate through its GuideWorks venture with Gemstar TV Guide. Comcast is also involved in an OCAP partnership (called OCAP Development LLC, and formed last August) with Time Warner Cable.

The deal also drove speculation about how well positioned (or out of position) companies like Microsoft TV and OpenTV might be once Liberate is absorbed. While Microsoft TV is already set up to get a good slice of Comcast's set-top software business, the same can't be said for OpenTV, whose shares took a big dip the week the Liberate deal was announced.


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